What kind of problem does Oracle have exactly?

FORTUNE — What do you do when you are the best company in your industry, but your industry is mired in a slump of mediocre performance?

That’s the dilemma faced by Oracle (ORCL), the enterprise software giant that has long been the most feared player in the competitive market for business software. Last week, Oracle reported that revenue grew to $37.2 billion in its fiscal year ended May 31, 2013. That was up from $37.1 billion in the previous fiscal year. Oracle is still growing, but just barely.

Oracle’s stock has had an impressive run over the past decade. After a post-dot-com low of $8 a share, the stock rose more than fourfold to a high point of $36.50 two years ago. Even as recently as this March, Oracle traded as high as $36.43. But amid signs that the enterprise tech market remains stagnant, Oracle’s stock has been declining of late.

This week, Oracle’s stock traded back below $30 a share. On Wednesday, shares traded at $29.86 in the wake of an earnings report that showed software sales fell short of analyst expectations for the second quarter in a row. Software sales at Oracle tie customers into long-term maintenance deals, but the company said in an earnings call that customers are delaying software deals or opting for smaller ones.

Goldman Sachs analyst Heather Bellini said in a report that the disappointments “were likely more macro driven than company specific,” noting that “while results were mediocre at best (in line with peers), this is a performance not typically experienced by the company,” especially in what is usually its strongest quarter of the year. And if Oracle isn’t excelling as it used to, that doesn’t bode well for the rest of the industry.

Oracle’s financial performance reignited a debate over how much of Oracle’s problems are tied to a macroeconomic slowdown in many of the global markets it’s involved in — Europe, Latin America, and Asia have all been listed as global weak spots — and how much is caused by a shift to cloud computing.

The big difference is this: Economic cycles come around in time, but the secular shift to cloud computing may mark a permanent move away from the high-margin business model that Oracle built its fortunes on (installing and maintaining suites of software) to the more utility-like, pay-as-you-go service model of most cloud-software sellers.

When Oracle’s stock fell 9% last week on its earnings, it had less to do with missing any financial estimates and more to do with a growing concern that the headwinds hitting Oracle are not cyclical but secular — that is, they’re here for good. That sparked a debate among analyst and investors that is likely to continue for some time.

John DiFucci, an analyst at J.P. Morgan, said in a research note that investors are asking about secular challenges before downplaying them. “Oracle’s recent struggles are largely macro driven, although we do believe that a change in sales strategy is likely also causing some disruption near-term,” he wrote. Longer-term, this shift will help Oracle, DiFucci said.

Others expressed more concern. Wedbush analyst Steve Koenig termed the revenue miss shocking and said its on-premise applications business was facing secular pressure from software-as-a-service competition. Oppenheimer’s Brian Schwartz pointed to the smaller transactions in the quarter as a worrying sign the cloud is taking a toll.

It’s not so much that, as in so many industries, smaller upstarts are stealing business from Oracle. Ellison famously dissed cloud computing five years ago, but Oracle has deftly adapted to new business models and other changes in the software industry since then. Most of the company’s sales hiring is focused on cloud offerings. And this week, Oracle announced cloud-computing partnerships with Salesforce.com (CRM), Microsoft (MSFT), and NetSuite (N).

Rather, the secular problem facing Oracle is this: Even though it’s doing a good job at transitioning to a new business model, that model is attractive to CIOs primarily because it helps them spend less on software. Oracle may well continue to carve out the biggest slice of the big, meaty revenue pie that is the enterprise-tech market. But that pie is shrinking slowly.

Well, that’s the thing about software. As it, in the famous phrase by Marc Andreessen, eats the world, it often diminishes the overall revenue that people and companies pay. Newspapers, music labels, and other industries have watched this happen. Now the cloud is doing it to the software industry itself. Oracle is only the latest to see what that’s like.

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